Industry Summary Articles

Informatica, an enterprise cloud data management leader, announced financial results for its fourth quarter and full-year 2022, ended December 31, 2022.

“Our solid fourth-quarter performance capped a year in which we delivered cloud ARR and subscription ARR above expectations. We achieved new annual milestones that surpassed $1.5 billion in total ARR and total revenues and $450 million in cloud ARR. Our performance demonstrates the durability of our business model and our diligent execution to deliver balanced growth and profitability,” said Amit Walia, Chief Executive Officer at Informatica. “Looking ahead, we are focusing on a cloud-only, consumption-driven strategy that is part of a multi-year plan driving new cloud business. With this strategy, we expect to streamline operational efforts as we aim to significantly improve operating leverage in 2023 and beyond.”

Fourth Quarter 2022 Financial Highlights:

• GAAP Total Revenues decreased 2% year-over-year to $398.8 million. Fourth quarter total revenues included a negative impact of approximately $15.8 million from foreign currency exchange rates ("FX") year-over-year.
• GAAP Subscription Revenues increased 4% year-over-year to $238.4 million.
• GAAP Operating Income of $28.9 million and Non-GAAP Operating Income of $113.7 million.
• GAAP Operating Cash Flow of $60.7 million.
• Unlevered Free Cash Flow (after-tax) of $91.5 million.

Full-Year 2022 Financial Highlights:

• GAAP Total Revenues increased 4% year-over-year to $1.5 billion. Full-year total revenues included a negative impact of approximately $48.1 million from FX year-over-year.
• GAAP Subscription Revenues increased 15% year-over-year to $857.2 million.
• Total ARR increased 12% year-over-year to $1.52 billion. Full-year total ARR included a negative impact of approximately $20.1 million from FX year-over-year.
• GAAP Operating Income of $25.6 million and Non-GAAP Operating Income of $350.6 million.
• GAAP Operating Cash Flow of $200.1 million.
• Unlevered Free Cash Flow (after-tax) of $288.5 million.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Fourth Quarter 2022 Business Highlights:

• Achieved a subscription net retention rate of 111% at the end of December 31, 2022.
• Processed 53.0 trillion cloud transactions per month for the quarter ended December 31, 2022, as compared to 27.8 trillion cloud transactions per month in the same quarter last year, an increase of 91% year-over-year.
• Reported 206 customers that spend more than $1 million in subscription ARR at the end of December 31, 2022, an increase of 35% year-over-year.
• Reported 1,916 customers that spend more than $100,000 in subscription ARR at the end of December 31, 2022, an increase of 15% year-over-year.

Product Innovation:

• Launched Informatica Data Management Cloud (IDMC) for State and Local Governments vertical to further enable governmental departments to modernize their data infrastructure with an AI-powered, secure, and scalable solution to make data-led decisions.
• Expanded Software-as-a-Service (SaaS) version of multidomain Master Data Management (MDM) to Asia with Microsoft Azure, serving broader Asia Pacific and Japan markets as customer demand for multitenant cloud MDM solution increases.
• Launched Informatica Data Loader for Amazon Redshift enabling customers with the ability to ingest data from AWS and third-party applications to load and combine data in their data warehouse.
• Launched Informatica Data Marketplace support for AWS Data Exchange offering customers a self-service data marketplace.
• Launched INFACore support for Amazon SageMaker Studio to simplify the development and management of data pipelines for building and deploying machine learning models.

Industry Recognition:

• Recognized as a Leader in the 2022 Gartner® Magic Quadrant™ for Data Quality Solutions report. This makes 15 consecutive times of being a Leader, and Informatica is once again positioned highest on the ability to execute axis.
• Scored highest in three data quality use cases in the 2022 Gartner® Critical Capabilities for Data Quality Solutions report.
• Received “Strong” rating by Gartner in Product/Services and Support/Account Management in 2022 Gartner® Vendor Rating report.
• Recognized as Design Partner of the Year and Data & Analytics Partner of the Year at AWS re:Invent 2022.
• Named among 2023 Best Places to Work in IT by Computerworld.
• Named a Winner at the 2022 Digital Innovator Award from industry analyst Intellyx.
• Named a Champion in Bloor Research 2022 Sensitive Data Market Update report.
• Named a Leader in the GigaOm Radar for Data Catalogs report.

Leadership Update:

• Appointed Michael McLaughlin as Chief Financial Officer. Mr. McLaughlin is a seasoned finance executive with 30 years of experience in the finance and technology industries.

First Quarter and Full-Year 2023 Financial Outlook

The Company provides the financial guidance below based on current market conditions and expectations and is subject to various important cautionary factors described below. Guidance includes the impact from macroeconomic conditions and foreign exchange headwinds. Based on information available as of February 8, 2023, guidance for the first quarter 2023 and full-year 2023 is as follows:

First Quarter 2023 Ending March 31, 2023:

• GAAP Total Revenues are expected to be in the range of $352 million to $362 million, representing approximately a 1% year-over-year decrease at the midpoint of the range.
• Subscription ARR is expected to be in the range of $1,005 million to $1,015 million, representing approximately 19% year-over-year growth at the midpoint of the range.
• Cloud ARR is expected to be in the range of $462 million to $468 million, representing approximately 35% year-over-year growth at the midpoint of the range.
• Non-GAAP Operating Income is expected to be in the range of $74 million to $84 million, representing approximately a 5% year-over-year decrease at the midpoint of the range.

Full-Year 2023 Ending December 31, 2023:

• GAAP Total Revenues are expected to be in the range of $1,570 million to $1,590 million, representing approximately 5% year-over-year growth at the midpoint of the range.
• Total ARR is expected to be in the range of $1,585 million to $1,615 million, representing approximately 5% year-over-year growth at the midpoint of the range.
• Subscription ARR is expected to be in the range of $1,098 million to $1,118 million, representing approximately 11% year-over-year growth at the midpoint of the range.
• Cloud ARR is expected to be in the range of $604 million to $614 million, representing approximately 35% year-over-year growth at the midpoint of the range.
• Non-GAAP Operating Income is expected to be in the range of $400 million to $420 million, representing approximately 17% year-over-year growth at the midpoint of the range.
• Unlevered Free Cash Flow (after-tax) is expected to be in the range of $340 million to $360 million, representing approximately 21% year-over-year growth at the midpoint of the range.

The Company is assuming constant FX rates for the year based on the rates at the start of the planning period. For reference purposes, the assumed FX rates for our top four currencies in full-year 2023 are as follows:

Using the foreign exchange rate assumptions noted above, the Company has incorporated the following FX impact into 2023 guidance:

In addition to the above guidance, the Company is also providing a first quarter and full-year 2023 weighted-average number of basic and diluted share estimates for modeling purposes. For the first quarter 2023, we expect basic weighted-average shares outstanding to be approximately 285 million shares and diluted weighted-average shares outstanding to be approximately 288 million shares. For the full-year 2023, we expect basic weighted-average shares outstanding to be approximately 289 million shares and diluted weighted-average shares outstanding to be approximately 298 million shares.

Reconciliation of non-GAAP operating income and unlevered free cash flow after-tax guidance to the most directly comparable GAAP measures is not available without unreasonable effort, as certain items cannot be reasonably predicted because of their high variability, complexity, and low visibility. In particular, the measures and effects of our stock-based compensation expense specific to our equity compensation awards and employer payroll tax-related items on employee stock transactions are directly impacted by the timing of employee stock transactions and unpredictable fluctuations in our stock price, which we expect to have a significant impact on our future GAAP financial results.

Webcast and Conference Call

A conference call to discuss Informatica’s fourth quarter and full-year 2022 financial results and financial outlook for the first quarter and full-year 2023 is scheduled for 1:30 p.m. Pacific Time today. To participate, please dial 1-844-200-6205 from the U.S. or 1-646-904-5544 from international locations. The conference passcode is 830565. A live webcast of the conference call will be available on the Investor Relations section of Informatica’s website at investors.informatica.com where presentation materials will also be posted prior to the conference call. A replay will be available online approximately two hours following the live call for a period of 30 days.

To view the original press release, please click here.

Search for Informatica on CIMdata.com